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Show Notes

Transcript

Felix: Today I’m joined by Gary Martin of RGG EDU. RGG EDU makes documentary based tutorials from the best photographers and retouchers in the world. It was started in 2014 and based out of St. Louis. Welcome Gary.

Gary: Hi Felix, how are you doing? Thanks for having me.

Felix: Good. Yeah, yeah, thanks for coming on. Before we hit record you were telling me a little bit about the transition period that you guys went through. Talk to use about how it all began, and essentially how you transitioned from where you were to the business that you’re in today.

Gary: Yeah, absolutely. After college I joined Peace Corps, and while in the Peace Corps I was living in Eastern Europe. While there I really wanted to make a documentary. I didn’t really know how and I went to the internet to look for some sort of online education. It was so hard to find anything. This is back in 2006, 2007. A camera, a specific camera, just came out, it was the 5D Mark II and it was the first camera that allowed you to shoot photos and do video.

We couldn’t really find any information so we had to order books and get them actually shipped to Eastern Europe to learn the process of documentary film making and the gear and stuff like that. When I got back from the Peace Corps, that was always in my mind, of, I want to do something that helps online education, that would have made it easier for me.

I was working as a digital tech. I was working in the commercial industry and I met my current co-founder and partner Rob Grimm in the business, who’s been in commercial photography and one of the biggest food and beverage photographers in the world for 30 plus years. As it happens, I had an opportunity to take a job for a really large company in Silicon Valley, or go out on my own.

So, I actually turned the job down, decided to take a gamble, start a company with Rob Grimm. We co-founded RGG EDU, which oddly enough stands for Rob and Gary’s Great Education. I think we were about eight beers deep when we came up with the name and just went with it. But it had start doing behind the scenes free videos on YouTube, just to see where it went, to nurture the idea before we actually launched the company.

For about two years we were working with other companies and making as many videos as we could that was behind the scenes, just to gauge interest. We wanted to treat it as a pilot, to see if there was a market for it. We decided that our first product at RGG EDU should be something that was the most niche, so we decided to do newborn photography with Stephanie Cotta, who at the time had a pretty big Facebook following. This was three, four years ago and it was still organic. When you posted all your fans saw it, the glory days of Facebook as a lot of people refer to it as.

We launched our first product on newborn photography. We were both in the Bahamas at the time, teaching a workshop. I remember the day that we went live, that turned our product for sale from coming soon, the orders started pouring in. I remember the Shopify app at the time, getting all those notifications of sale, sale, sale. I was like, “Holy cow, we’ve really got to quit commercial photography and focus on this.” So that’s really what we’ve been doing the last three years, improving the website, improving our product, growing our customer base, learning more about our customer base. Where they’re from, what they’re into, what they want to see and make incremental improvements and focus on the quality overall of both the overall user experience and also the quality or our product.

Felix: Got it. You mentioned to test the waters you guys both created free videos on YouTube to see where it went. What was the thought process behind that? Why come out with free videos rather than just launching with a paid product right off the bad?

Gary: I think you have to build a lot of the user base and trust. I think starting out at the time we didn’t really know exactly what we were doing. I did have a bit of experience with documentary film making but for us it was still a learning process. We were learning on how people learn, why people learn. I was doing a lot of research on the theory behind how adults learn, which is completely different than how kids in grade school learn.

For us, we were really going back and forth on how long the videos should be, what free content should be like versus paid content, which is completely different. People expect different things. We also wanted to gauge the interest overall of what got views, what got shared, what didn’t get shared. So for the first really year, year and half, this was 2013, into 2014, we went on, taught on CreativeLive, which is a pretty big competitor of our now. A little bit of a different product, they do live workshops in the studio, so everything is recorded live and then it’s available the next day. Whereas ours is shot and planned like a live action film. It takes us about six to seven months to come out with one product. It’s a little bit of a different process.

In that first year, year and half, we were really figuring out our voice so to speak, and really figuring out how our product was going to differentiate in the market place and how we were going to be unique.

Felix: What made you realize, what made the both of you realize, that okay, now we’re in a good spot, now we understand enough to start selling the digital content rather than just offering it for free?

Gary: Just research, what was available in the marketplace. Three, four years ago was a completely different arena than what it is now. It’s a much more crowded marketplace. There’s even more companies, there’s website like Udemy that source your education from all over the place. With something like that the quality is all over the place, from pretty decent, to a lot of it is not so great. Anything from the quality of audio to the length or the credibility of the instructor.

We essentially started with newborns, because we knew that that would be the hardest to sell because the market itself is 90% to 95% women. So when we came up with that product we knew that there wasn’t a lot out there, and we knew we had an instructor that made amazing images. It was like, how do you get the babies to do this? And nobody knows how to do it, and she actually spent the better part of almost four to five years figuring that out.

We’re coming from a standpoint of, let’s tell your story and let’s help other people succeed in creating their own business by taking that frustration out of it. That’s why it takes us six to seven months to do a tutorial, because we spend two to three months planning and writing. Then we spend about a month sometimes in production, including the post-production side, and then the marketing and the awareness campaigns and the starting of the top funnel, all the way down to the bottom funnel marketing. It takes a long time.

When we first started out, just the research, to answer the question in the longest way possible, understanding the market, what’s available, what’s out there, doing questionnaires to 40 to 50 people. Like, what do you want? What do you want to see? And understanding the marketplace better.

Felix: Yeah, something that’s interesting that’s happening in education, you alluded to this, is the commoditization of the education. They are sites like Udemy are trying to hit almost a quality goal, putting as much content out there as possible, whether it be good or not, and trying to absorb people into their universe that way.

Now, whether it be digital content or education or any other industry, I think a lot of entrepreneurs face this, where they have a product that is obviously good, but now they have a lot of other companies, other competitors out there that are churning out products that maybe the consumer cannot tell the difference. Now in your situation, how do you combat that? How do you try to position your brand, position your products in a way, in a marketplace that is becoming, essentially driving the prices down by producing more and more content and more and more products?

Gary: Sure. I think the short answer, it’s easy, it’s all about the quality of what we do. What we do is incredibly difficult to provide for other photographers that want to learn. It’s really easy for one photographer, the stereotypical YouTube photographer posts a video, it’s about one thing and it’s eight to 10 minutes long. The audio is terrible, there’s only one angle, they’re using jump cuts. That is everywhere.

With our productions we spend so much in set design, we spend so much time planning. It takes a small army of people to do that. It comes down to the barriers of entry of creating a quality product. That’s why we have such a high rate of repurchase. A lot of our customers will spend on average $600 to $700 with us per year on two to three products. Those two to three products take a while to go through. So they’re learning quite a bit and they’re taking away so much from our products, we have such a high customer satisfaction rate, if you look at the bottom of our website, we’re using Yotpo as our third party reviewer.

It almost looks fake that we have such high reviews on every product. It’s almost working against us because sometimes people don’t believe that we have that high of a review. It’s like, we spend a lot of money in production, tens and tens of thousands of dollars for every single product we make. We’re still a small company, we’re still a small team of 10 full-time employees, but spend a lot on product when we go somewhere. We’ve been to Papua New Guinea, basically risked my life to make a tutorial. We’ve done them in Brazil. We do them on location. We don’t do them, not all of them … we’ve done a few but most of them are done on location.

To bring a team of 10 people across the world or across the United States to do that, that’s an experience that the user really loves and appreciates. It’s not just Joe Schmo in his mom’s basement making a video on how to shoot portraits, just regurgitating other people’s content. I spend a lot of time research the people that I want to work with. Again, we’re not the ones that are teaching the photography. Our product are different because we’re going out there and finding unique photographers that either A, have huge followings online, or B, are legends, just simple legends in photography that have been working for 30, 40, even 50 years, and have such a knowledge base that comes out in such a way that’s inspirational.

It’s both what we refer to as the EQ side of photography, what’s not necessarily, put your light here and set it at these settings. It’s learning all the intangible things that you pick up from years and years of experience. In a way, we always refer to this kind of similar to, if you had to opportunity to learn Christopher Nolan’s process on how he makes films, wouldn’t you pay for that? If you’re into Christopher Nolan the answer is, “Hell yeah.” For the photographers that we’re marketing to, we’re making this documentary that our products are 15 to 25 hours long on average and have abour 100 videos in the download and a bunch of supplemental materials and raw files from that instructor that you can work on, which nobody else really likes to do but that’s something that we’re known for. So we have everything on the table, we don’t let the instructor keep a few secrets for themselves. The instructors that we work with are passionate about leaving something behind, having a legacy and passing on what they know.

There’s a running joke that there’s a lot of photographers, or certain part of photographers, maybe they’re old school, that they think they have some sort of secret, something cornered about photography that makes their product unique. That’s really not the case. Our instructors are all fantastic individuals that love to give back. They have a unique product and they have a unique style. We spend a lot of time going through that to make a product that really, really cuts years off of the learning curve.

Felix: Obviously you have an amazing product, and often I will hear from other entrepreneurs that will say they have an amazing product but they can’t get people to buy. In those situations, is it that they do have a great product and it’s falling on deaf ears and it’s a marketing problem? Or do you think that they should go back and revisit the product and actually make sure that it is as high quality as they believe it is? Do you think that the solution is always to focus back on producing a greater product? Or is there a part of it in your situation where there’s some marketing behind and where you have to get people to believe in the product to try it out for the first time, and then experience the amazing, and then they’ll buy into your brand essentially?

Gary: Sure. Marketing is a huge part of. I can’t speak for everyone’s products that might be great, but just delivery and how you explain that product, and how you convey that product, and actually a website is a great way to do that. If you don’t have a great experience in the first few minutes of landing on a website, you have super high bounce rate maybe and you don’t even know that you have a super high bounce rate, then that could be the reason. Your website could be the reason that’s preventing people from seeing your product.

Everyone says seven points of contact in marketing, as how many times it takes for someone to be sold on your product and get through that bottom level funnel. That’s why we invest so much time, and we actually haven’t in the past, we didn’t start out making free content and providing free high quantity amount of videos on YouTube or Facebook. We were so focused on a making a great product we kind of neglected a lot of the marketing tactics.

That was because there was only, at the time there was only one or two, three employees we had in the first year. We simply didn’t have the manpower to do marketing correctly. I think marketing is a huge point of contact. You have to focus on it. You have to think of everything. How do you promote your product? For us it’s a pretty big investment into the trailers, is what we call them. Then we also have something called super-trailers that we use only on Facebook and Google marketing. That’s the funnel that leads then to the landing page of our products, and then they can see the master-trailer, which is a little more in depth. It’s usually four to five minutes long.

Now, today we’re investing a lot in everything, from YouTube, to Facebook, to Google, to retargeting. It could be overwhelming, even for a team of 10 people it feels like I need 30 more people working here to do what we want to do. But it’s this never ending customer service and staying on the ball with what does our audience want and how can we make it better?

Felix: You mentioned earlier that baby photography was the first topic of your tutorials that you guys created. Why did you decide to go niche rather than a broad topic, like how to take portraits or something like that?

Gary: One is because I had access to the photographer, and two that I knew that the product would be absolutely huge. If we can make and sell something and have success, I think we spent overall $500 on our initial investment. That investment bootstrapped our entire company to where it is today. We’ve never borrowed money, we’ve never taken out loans, we don’t have any VC investment groups screwing with our company culture, anything like that so to speak.

I wanted it to be hard. I wanted to prove to ourselves that if we can sell newborns, we can sell baby photography, it’s going to make portrait photography, that’s going to make fashion and editorial and commercial photography way more palatable and way easier for us in the long term, and know that it’s going to sell.

Felix: Got it. It was almost like a ultimate litmus test to see if you could sell this, then there is an actual market for you to essentially compete in.

Gary: Yeah, yeah.

Felix: Got it. You mentioned earlier about how there’s a delicate balance between free content versus paid content. I think is a challenge that a lot of other store, whether they sell digital products or not. There’s always drive to create more and more content, but then of course you need to focus on actually creating the products that will pay the bills. How do you see the balance, how do you see the difference between what kind of content should be free versus what kind of content should be paid for?

Gary: Yeah. The content on YouTube, typically in the five to 10 minute range. That’s pretty fast paced, that gets right down to the bare bones of it and it’s also high quality. That seems to be a good trust builder with people. We didn’t do that for years. We actually just recently started doing that.

One of the most recent things that we’re finding success in is a couple things. On YouTube specifically we had been doing interviews with people. It’s kind of like this podcast here, where you ask a bunch of questions and you learn about the guest. We’re do an interview and we launch it on YouTube. The interview would be maybe an hour long and people kind of tune out. Whether that content was absolutely great, it has a short shelf life. It doesn’t go very far, so what recently started doing was, let’s take that interview concept and break that up and fire the questions at the person, and break it up into 23 or 25 two minute videos.

Then we have this whole arsenal of videos that we can schedule on Facebook, on YouTube, and flip flop the days on when we publish them on which platform. Because we try not to, for the most part, share a video on Facebook that was made on YouTube. We like to upload natively to that platform because Facebook has made it that way, that YouTube videos won’t do was well. Good for them. But just investing in the quality of content, releasing free content like that, and then also mixing your platforms. It gives me a lot of anxiety to invest too much into any one platform because Facebook can completely change what they’re doing, or how and what they show people at any moment. We saw a lot of people get really mad and lose their audiences when they did that.

If you’re fully invested in your Facebook audience or your Instagram or whatever platform you’re using, and they switch that off, you better have a contingency plan of how you’re going to get whatever message you have to your clients. Email’s always the safe bet, I don’t think that’s going to go anywhere. But in terms of what your business is and how you’re getting that content out, is important to diversify your platforms. Honestly that’s more free content that we make … Actually in January or February we launched the RGG EDU podcast. We looked at, how are we going to make free content that’s not going to A, take us a ton of time to edit, because that’s extremely costly, and B, maximize and keep going with our reputation for really high quality.

We attend two or three conventions every year. We were like, “You know what, let’s start a podcast. Let’s rent a really nice suite or hotel room where that convention is at and then let’s invest a lot into scheduling people for that podcast.” So we’ve been to conventions now and switching our strategy. We won’t even go to the convention floor of whatever convention we go to. We go to Photo Plus or WPPI, or even Photokina in Germany, we don’t even go to the convention. We bring all of the guests or the speakers that are at that convention. We have a producer, or assistant producer, go get them, bringing them up to the room. The whole room, we usually have a bathtub full of booze and coconut water and drinks, and we do an in person interview. We have a four mic setup and we crank out usually about 15 to 20 podcasts at a time.

Then we publish them on our podcast website, which is actually on Squarespace. We wanted to even diversify and invest in another platform and rebrand that as a free content only, that we’re not trying to sell you anything, we just wanted to give you a valuable product that was for free. We’re actually using, in a sneaky way we’re using the buy button from Shopify on Squarespace, so all that information, all that customer information easily funnels into the Shopify data, and then we can easily follow if that person then became a customer. We allow, on that Squarespace website, we allow them to download the entire season all at once instead of waiting for a new episode to come out. Then we drip them out every Wednesday on SoundCloud, which then feeds our iTunes and Stitcher and Google feed.

Felix: Yeah, obviously I’m a big fan of podcast. How has the podcast helped your business? What has it done to help you grow the business?

Gary: Yeah, so to get get into the numbers of that, we can see pretty big ROI on people finding out about us first on the podcast. We see and track whether, okay let’s say that the podcast was the first product that this person purchased. One of the apps that we use as a plugin to Shopify that I absolutely love is Conversio. It think it started as receipt-based, I think it was called Receiptful.

Essentially if you download the podcast from our website you get that receipt sent to you. In that receipt it makes a unique on-time use discount code in Shopify. So then they get that, saying, “Hey, notice you’ve downloaded your product. Thank you so much for becoming a first time customer. Here is a discount code that you can use on your next product.” So we can see a pretty high rate of people saying, “Wow, I love this podcast.” There’s information in the downloads that we provide that takes people to our podcast page. We have a really nice PDF that you get that showcases all the products that we have and our instructors. So then we can follow that whole customer journey. And then looking at the data, we do it really at the end of every month, we have a report that says how many people downloaded the podcast, and how many of those became customers. It really helps us justify the investment that we get for investing in one of the free products that we have, that’s the podcast.

Felix: Very nice. How do you get the attention on the podcast in the first place? Is it mostly through people visiting that podcast specific website? How are they finding you?

Gary: A couple different ways. One, we’ve gotten every season but the very first season sponsored. The first season was like our pilot so to speak. Actually I rented a 50% compound in Puerto Rico and funded the whole trip and invited a lot of influencers in the photography community. We brought them all down to Puerto Rico and that was our pilot. We recorded the episodes. We started with a product, and then I used that product and shopped it around, combined with our audience size and our demographic and our core customers to sponsors.

So every podcast has a sponsor. That sponsor itself has a similar target market but a different product, so they’re willing to invest the money to sponsor it. We only have one sponsor for an entire season of the podcast. They introduce … one of our terms of agreement is they send out a newsletter to their audience to introduce, “Hey, here’s a whole season of podcasts brought to you by,” let’s say SmugMug was our most recent sponsor. We get introduced to new audiences that way.

Another way definitely is a continual Facebook ad that is either through retargeting on Facebook or Google, or we’re targeting new audiences of who we think would be a right fit for downloading the podcast. We do it that way.

Felix: How did you get sponsors for the podcast when it basically has no track record yet?

Gary: I think just by pairing it with what the size of our company … we always lead with the size of our email list, things like our open rate, who our current customers are. The sponsorship package that we put together basically lets them leave their logos and links to their website on the internet in perpetuity forever. So they’ve just invested in advertising that’s never going to leave and they know, I guess who have a lot of faith, they they don’t know, that we’re only keep growing and keep getting bigger. So just the ROI on that is good, because we do direct a lot of traffic from our Shopify website to the actually RGG EDU podcast.

Felix: Got it. So maybe for those out there that might not be as large as your company, start with sponsors that are more comparable to the size that you’re at and position [inaudible 00:26:57] positioned as if they’re not just buying ad space, but then show them that there’s potential for growth and they’re partnering with someone that’s actually going to help drive traffic back to them.

Now one thing about, with podcasting like you mentioned before, is that you’re selling … You’re not selling them but you’re publishing them all at once. It looks like you’re putting together as seasons. What kind of benefits have you seen from that approach?

Gary: I think with the seasons, they have different themes. We did our most recent season that is not yet published, it’s been in the can for a couple months. We have a backlog now through October. It was at NAB. NAB is more video based. We were able [inaudible 00:27:47] we had a company in Australia [Atomos. 00:27:52] they make external video recorders and monitors. It’s products that we use.

We approached them and had been building a relationship with them for about a year, and pitched the idea and said, “Hey, we’d love to do this. Would you be a sponsor? Could you also help us get introduced to producers and directors and everyone that is in the film world?” Because that’s something, that’s a market that we want to go into, but that’s not a market we’re currently in. They were able to introduce us to a lot of people. That season is more film based. Then we did a season down in Orlando before that, which was more post-production based. So we theme the season around that and then we use that theme of the season to narrow down target marketing on Facebook based on interest to make it more relevant to that person.

Felix: Got it, that makes sense. I like that approach. You mentioned earlier about how, some of the ways that you were able to demonstrate and advertise your digital content through these trailers and super-trailers. Can you say more about those?

Gary: Sure. Our super-trailers typically are more fast paced. We try and make them less than a minute. I’d say it’s about 50% chance that they won’t have any talking or audio from the instructor, and then we’ll use text. I think a decent amount of people, especially on Facebook, actually watch a lot of videos with no audio. So either, the super-trailer itself it’s a minute or less, either definitely all of our videos that go online have subtitles, or it has text and it’s a fast pace.

So it gets your interest, it doesn’t tell you enough but it gets you kind of like, “Oh man, what did I just watch?” Because if you leave them feeling satisfied I would say with an ad, and they completely understand what the product is, then there’s no reason for you to go to my website. If you don’t go to my website then you don’t get cached in our pixel, our Facebook and Google pixel, which is constantly building an audience of people that land on my product X page or product Y page.

All of the pages that we have are building individual audiences of pixels and traffic, so we can watch that traffic build, and then we’ll hit them with a new ad maybe two or three weeks later that is a different super-trailer, or maybe it’s a unique offer that says, “Hey, this person has visited our website but hasn’t purchased. Let’s send them X, whatever, advertisement with an incentive.” They’re not always incentive based. We don’t always we want to come off as someone’s that’s always on sale or always offering a deal, because that trains the customer to think that way. But definitely that’s something that we invest in in terms of our audience building with out product pages.

Felix: So you have some kind of funnel for your ads, where if someone sees an ad they go through your site, you hit them with a different type of ad and essentially try to get them back and purchasing. How do you have this all setup? Do you have any applications or tools that you use or depend on to manage all of this?

Gary: My God, there are so many. It has taken us so long. It’s taken us so long to figure out. Part of our team is, we have three people really dedicated to the marketing side of it full time. We didn’t invest in that in the very beginning. I think I’ve probably wasted tens of thousands of dollars on Facebook advertising or advertising in general. There’s always that saying, 50% of your advertising works but nobody knows which 50% that is. I think with Facebook it’s been really one a big learning curve, but two I think a lot of people can request to get a Facebook advisor.

We even use third party companies, that never really worked out. At the end of the day, it’s not something that another company is going to … it probably has worked for some companies, but at the end of the day if you’re your own business and you’re the one behind your message, you’re the one behind your marketing, you’re going to have to come up with the resources to do that. I think to answer your question, we use for the most part definitely the Facebook pixels. You have to have your website pixel.

You have to understand that backend of Facebook. Just scour the web to understand what everything means. If you’ve never been in the backend of Facebook, or maybe you’re just getting into it, it’s overwhelming. Even the backend of Google, there are so many buttons, there are so many things that could be turned on or could be turned off, that if you really don’t know what you’re doing you can waste a lot of money quickly. But if you do know what you’re doing you can really see a pretty high ROA on your ads to get people to your website, to get them to convert. It’s something you can, if you go down that road and you start to invest in it, you have to stay on the ball and you really need someone fully dedicated to doing that because it can grow your business exponentially.

Felix: Yeah. How do you know if that’s the situation? How do you recognize that, okay, I have a good handle on this, let me pour money into Facebook ads? How did you know that, that you guys were ready to scale up?

Gary: It’s just looking at Google analytics, where are people coming from? How are people resonating with your ads? We use things like Hotjar, something I think every website owner should use. It shows you a heat map of where people land on your website. That’s when arrive after the ad. I think with Facebook ads and Google ads, man it’s kind of hard to explain. It’s been such an uphill battle understanding that, but number one is you have to break up your ad sets. We don’t do general ads that lead to the website.

All of our ads are targeted on one specific product. That one specific product has any number or A-B testing on audiences or interest. It takes a lo of money just to understand if an ad’s going to work. I think one good piece of advice is, if you’re going to go down the road to launch ads, you’re going to have to invest in understanding which audiences respond well, which age groups work well. It may be just starting with the Google analytics of who your customers are, to then target them.

Felix: When you say which groups respond well, there are so many metrics that Facebook allows you to see. Whether it be engagement, clicks, and of course ultimately conversions. Which ones do you pay attention to early on to get a good understanding of who’s actually interested?

Gary: Really the only ones I look at are the cost of conversion, or the cost to check out. We have, our check out page is pixeled, so that’s really the only thing I’m really concerned about. I don’t look at impressions. I think impressions is bullshit. I think there are a lot of maybe sketchy things going on with what impressions are. Like video views, that’s another thing I don’t really look at, I don’t really care about. That is important, I just don’t trust it with Facebook. I trust it more with YouTube.

YouTube has been a source of traffic we’re getting a lot of interest and conversions from and we’re earmarking more of our budget that was for Facebook into YouTube ads. But just having, for us I think having a few metrics that you watch and just watch those, because there’s an unlimited amount of CTR, CPM. You could have metrics for everything. I think I found out the hard way, trying to measure those takes up way too much of your time and doesn’t give you a really good look at what’s successful and why. So our marketing team, one of the only metrics, or one of the only goals we look at is just driving our ROA down and driving the cost to get someone to purchase down. That’s really the only thing we’re looking at.

Felix: How long do … What’s your testing process? Do you setup an ad set and then have your interest targeted and then wait a few days or a few weeks? What’s your testing process when you are trying new interests out, or new combinations out?

Gary: Sure. If we launch an ad and we don’t have any conversion on it … most of our ads are conversion based. We try and keep our YouTube channel as more of a, I would say educational or first impressions, and then we use Facebook strategically for more lower level funneling and more conversion. I would say if the ad isn’t converting within three or four days, and I think your ad budget needs to be at least maybe $50 to $100 a day. Every single Facebook advisor that we’ve worked with and even some third party consultants have the same general number of $50 to $100 a day, more if you want to find out if it’s working or not sooner. You’re going to waste a little bit of money figuring out if it works or not.

Felix: Sorry, how do you spread those $50 to $100 out? Over how many different ad sets?

Gary: I think at any given time on Facebook we have 20 to 30 ad sets going now, but we definitely didn’t start out that way. We’ve very carefully grown and we have only grown because when we increased our budget we are really methodical and really cautious of whether or not it was going to work or not. Some ads work, some ads don’t. It could be the copy, it could be the photo that was used. We would have missed our mark on the age group. But how cool is it that we can advertise something and say, “I only want males 24 to 35 to see that live in the United States that have an interest in XYZ and that have an annual income over $75,000.” That’s unheard of today.

Felix: Yeah. How long do you give it a shot for each of these ad sets before you make the decision to kill it or to keep it going?

Gary: I think you should definitely look at the frequency. How many people have seen the ad more than once? Then also it starts to trickle off and if we start seeing our ROA get above a number that we’re not comfortable with we will launch a different super-trailer with a slight different approach to who’s being target and why. I definitely think people get tired of seeing the same ad, or whatever ad you had might have lost its initial sizzle so to speak. So every time we make a product we usually have three super-trailers.

That first super-trailer is earmarked for the first three month, the second one for the third three months, and then we can recycle … we found that videos do the best for us. We don’t do much with photo based ads or ads that aren’t moving. I think people just scroll right by those. We’ve got to get your interest with passion, we’ve got to use audio, we’ve got to have quick cuts. The instructor has to be saying something that resonates with you, that hits a nerve with you. So video based ads work for us, print based ads might work way better for other companies with different products, but definitely for us video’s been the way to go.

Felix: So you look at the frequency to see if there are too many, basically the users are seeing your ad too many times and they’re not responding as well, usually it is a good sign that you want to switch out the content.

Gary: Yeah. I wouldn’t say that’s the number one thing we look at. That’s something we consider. It really comes down to, at the end of the month when we are looking at the numbers, and we have someone, our director of marketing is in charge of ad management on a day to day basis. That’s something you have to look at every single day, because if something goes wrong or if something stops converting for some reason, you’ve got to know and understand why.

So really, we’re just looking the ROA or the cost for a conversion, the cost for a checkout. If that starts getting too close and our margins start getting too low, then we know that maybe let’s invest in another product for now and let this one sit for a month or two, maybe a few weeks, or just hit up our email list or hit up another way to advertise that product. Sometimes we release free sections of that product, so if someone lands on the page we have a popup that comes up that is specific to that page that says, “Hey, download a free section of this product that we’ve never released before.” They put they email in and get sent an automatic link. Just Facebook or just Google, that’s not the only thing we do. There’s got to be six to 10 different ways to get people’s interest to sign up or to view something or to just participate in your product and participate in your company’s website or social media, whatever that is.

Felix: You said something interesting earlier about the way that you approach creating the video ads, where you want to almost tease the product and get people’s interest but then not give away everything so that they feel compelled to come and learn more. Which is an interesting approach because when it comes to non educational content or non digital content where you’re selling a pretty simple product, people will often show everything. Show how it works, show all different angles and basically make it as if you can imagine holding that product, the physical product, in your hands. Tell us about your approach, how do you … Explain a little bit more about why you approach it by teasing the product more than anything?

Gary: I think a mistake we made earlier on was making the trailers, our master-trailers is what we call them, it’s the best way to explain what the product is, I think we focused too much on telling people what was in the tutorial download instead of really getting the instructors as the centerpiece or the motivational or inspirational piece, and getting people excited about the product and learning from that person.

That’s something I think we got from feedback and we got from us coming and critiquing our own products, saying, “Man, this needs to be more about what people are going to turn into from watching the product.” Because there’s a lot of truth, that they’re going to learn a lot of valuable information from the product, instead of just telling people the very traditional simple way of, “In this tutorial, it comes with X amount of videos and you’re going to have so many hours of this and so many hours of that.”

So we kind of had that ah-ah moment in our company and we really started focusing and making the instructor more heroic and more honest, and a no-bullshit approach to explaining what it’s about and being more of a documentary based tutorial than a traditional YouTube tutorial. We saw such an increase in views. We saw such an increase in the comments, participation online of people responding to the ad. So more emotional, more EQ based and less IQ based I would say is something that really drove our master-trailers to get more views, and actually to get people to watch the whole thing.

Felix: Right, right. So basically tell the customer how they will be transformed by using your product, rather than putting the focus on the product and what’s inside of it. It’s I think this idea or this story type of a hero’s journey, right? Show them from the beginning and what they can become. I think that’s important, you want to show the benefits through that transformation rather than just talking about it, because obviously talking about it doesn’t do as well as showing how they can change as a person. Now I want to talk a little bit about YouTube, because you mentioned before about how you are doing this balancing act between how much you should invest in YouTube, how much you should invest in Facebook? What do you find the difference is between the type of content that needs to be produced for one platform versus the other?

Gary: It’s a good question. I would say, man there are so many great YouTube channels out there that I look at and I’m like, “Man, I want to do that.” I think the whole crazy YouTube community of YouTube influencers is inspirational to me. I love checking out a really well curated YouTube page where all the thumbnails match and it’s good quality content. I think the channel overall on YouTube is a wise investment if you can churn out a lot of videos.

The nice thing about your YouTube channel is all the videos on your landing page are right there. Whereas with Facebook I don’t think they’ve quite figured out exactly how a video based company can present their videos, because it’s the never ending always changing timeline is what you see. Very rarely do you actually go to a Facebook’s business page. We don’t see a lot of engagement on … Not always, sometimes if I really resonates, but if we upload a video organically and it’s not paid for to our Facebook page, not a lot of people are going to see that. Unless there’s an amazing call to action and it hits an emotional nerve, it just doesn’t get a lot of views.

It’s not going to be a great time investment on your part. We’ve kind of abandoned that for the most part. We do post a few times a week on Facebook, but I think it’s wiser if you’re not going to put money behind your video ads to invest your time into curating and uploading to a YouTube channel. You’re going to have a much higher percentage of your audience watching it. You’re going to have a better engagement with comments. I think it’s easier to comment and have a conversation with people on YouTube than it is with Facebook. There’s so much chatter and so much to respond to on Facebook that it’s overwhelming.

Felix: Would you not recommend or recommend against having or running YouTube video ads if you don’t have a good solid presence on YouTube already with a large collection or library or videos?

Gary: No, I don’t think so. I think it depends on your product. The call to action at the end of your ad is going to take people to your website if you set it up that way. I think if you’re trying to sell someone on something or get them to convert on whatever it is you want to them to convert on, if you take them to your landing page if you don’t have a big YouTube following, I think that’s completely fine.

Felix: Got it. How was the ad buying experience or targeting different on YouTube compared to Facebook?

Gary: It’s all tied in with Google, so it’s under the Google wing. It’s pretty much the same thing, the backends they essentially tell you the same thing. Google has been at the game way longer and it’s been a bit of a brutal process with … We’ve been with Facebook since they launched it, and the early days of Facebook ads was frustrating. You had to download the Power Editor and it could only be on Google Chrome and you couldn’t do it on Safari.

The backend, it didn’t have the columns that you wanted to understand. You couldn’t, and you still can’t to this day, basically do A-B testing on [inaudible 00:48:42] reporting … let’s say I launched a ad and I want to know … basically you use eight interests, so people that like a certain page. I can’t launch those interests or get feedback on those interests under one ad and get, understand if people from that like this page did way better than people that liked that page. I have to launch eight different ads and then A-B test them all against each other to do that.

It’s like, Facebook you could easily make this happen, but you’re doing it so I have to invest way more money into each ad. YouTube under Google has been … It’s been at the game longer so it’s a much better experience, but I think I read recently that 20% of the Internet’s traffic is Facebook and people are completely addicted to it, so that’s where people are at. If you catch people where they’re at and it’s relevant to them … Facebook for us has been a bigger, a better return on our investment than Google. Early on with Google with started investing in search terms and we were researching keywords and what are people searching for to learn photography?

We really came to the conclusion after I’d say six months and thousands and thousands of dollars wasted, that people that were looking for those, let’s say like how to dodge and burn, they’re looking for a free YouTube video on how to dodge and burn, and they don’t want to come to our page or see our ad which takes them to a product that’s $300. So we were seeing very, very, very small margins and it was just a, I wouldn’t say a complete waste of money because we learned a lot from it. We learned not to invest in search terms like that, so it was valuable in that sense. But Facebook for us has been a much bigger ROI, up until YouTube. YouTube is a close second for us.

Felix: Yeah. One challenging thing I think when you’re competing in an industry is that you’re competing for photographers, videographers, and the other companies that are trying to advertise to them are selling very expensive products, right? Probably your products are a high price but you’ll see that people are selling equipment, it can range into the thousands of dollars. Now because you’re competing with people that have such higher price points, does that affect how you run your ads, who you target? How do you think about your competition, how much they’re pouring into trying to reach the same people as you?

Gary: Yeah. It’s a good question. I think for us, we have a little bit of wiggle room because our products are $300. If our products were 999, the margins get so small I think with investing and marketing, if you have a really cheap product you better have a huge very general audience, otherwise you’re going to waste, I wouldn’t say waste, but you’re going to invest a lot of that money into … I would say your margins are going to get eaten pretty quickly because it’s costly to advertise on Facebook.

There’s a lot of competition and there’s a lot of other ads out there. It takes a certain threshold of money to convert. I think we us, we are on the higher side of pricing, but I think it matches our quality. A lot of our competitors, you could say Joe Schmo that makes wedding tutorials and makes him about his own tutorials and he sells them for 999 online and runs a Facebook ad and sells it for 99. He might do great and his margins might be fantastic. But I think in the long term if you just have one product it’s going to be harder to do and have a harder shelf life or longevity in your company.

Felix: Got it. Now when it comes to running the business, it sounds like you have these systems in place that you developed over time. Can you share any tools or applications that you are a big fan of that have helped contribute a lot to your success?

Gary: Yeah. I think overall the backend of Shopify saves us a lot of time on easily exporting reports. It actually recently got way better. That I think saved us quite a bit of time. I think number one overall you just need to have a really good CPA, someone that you meet with on a regular basis to go through the numbers and let you know, or give you the assurance of, “Yes, this is working. This isn’t working. You can hire this person.”

I think every business owner, number one if you’re going to be in this for the long term put off the accounting to someone else. We made some mistakes early on trying to adopt or use some online accounting systems that we thought we could use to save money, and that ended up costing us way more money in the long run. So I would say number one, definitely invest in a CPA. I think some other systems in place, we’re trying to figure out, I think we’re looking for a smart business intelligence program that really automates a lot of the these spreadsheets and a lot of the graphs that we make at the end of every year. But we haven’t quite found that for our company size.

It does exist but it’s incredibly expensive. Because it would be great for us to have an automated report that says, “Here are all your ad sets, and here’s the ROA, or the cost to convert on every single ad. Here’s how many conversions you had this month.” If I can easily get that report just by hitting a button, that saves me so much time because have to invest a lot of time into just going through the numbers. Being able to export that in Shopify and then import into Excel and then just to look at the numbers, is time consuming and that costs you money. So we’re definitely looking for some good business intelligence tools to do that and automate that process.

But other than that, I would say to automate our business. On the back end I wouldn’t say we have too many things that automate. I think we just separate days of the weeks, times of the month where we all get together and have to knuckle down and spend a large part of our time making sure that what we’re investing in is working. You’ve got to put in the work. Rob and I have been working eight days a week since this thing started. It’s totally worth it. I think working for yourself 100 hours a week is better than working for someone else 40. I wouldn’t change it for anything, but if you’re going to be in that entrepreneurial mindset then you’ve got to bust your ass. I’m hoping the hard work pays off for future Gary. I think it will.

Felix: Awesome, great message. Thank you so much again Gary, so rggedu.com is the website. Where do you want to take this next? What are some big goals for next year?

Gary: Big goals for next year, I think we’re getting more into motion. So transitioning and telling the story of some famous directors also. Meeting some of my idols in photography and telling their story. I’m a huge fan of programs, shows on Netflix like Chef’s Table. I’d love to keep incorporating really high quality documentary content that really motivates other photographers or business owners that need to shoot their own product photography.

They find a $300 that allows them to shoot their own product photography for their own website or their Etsy store or whatever that may be. I think if we keep providing value and we keep getting that feedback, we’re going to be able to grow and we’re going to be able to make more of these tutorials for other people at a faster rate.

Felix: Awesome. Thank you so much for your time again Gary.

Gary: Yeah, thank you Felix. I appreciate you having me.

Felix: Here’s a sneak peek for what’s in store the next Shopify Masters episode.

Speaker 3: When you work with artists that are set on their own vision and they don’t understand that they’re actually being hired and it’s somebody else’s vision, it’s a challenge.

Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today visit shopify.com/masters to claim your extended 30 day free trial. Also for this episode’s show notes, head over to shopify.com/blog.

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About the author

Felix Thea

Felix Thea is the founder of Traffic and Sales and host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs. Got something to share with Shopify Masters listeners? You can submit your story for consideration.